12/8/14…’tis the season…

Quote of the Day from the Friars Club Encyclopedia of Jokes: “I’d lie to come back (to life) as an oyster. Then I’d only have to be good from September to April.” – Gracie Allen

Bloomberg Quote of the Day: “You cannot depend on your eyes when your imagination is out of focus.” – Mark Twain

This week’s economic calendar is fairly light. The highlight of the week will be the November Retail Sales (Thursday) and November PPI (Friday). We will also get October Wholesale Trade and October JOLTs Job Openings (Tuesday), November Treasury Budget (Wednesday), November Import & Export Prices, October Business Inventories (Thursday) and December Consumer Sentiment Preliminary (Friday). Courtesy of Economic Data Service

Bloomberg Top Stories:
*Oil Extends Retreat With European Stocks, Russian Bonds as Dollar Rallies – same old
*One Hundred Years of Bond History Explains Why Bears Destined to Be Wrong
*Russian Bond Yields Rise to Five-Year High on Interest-Rate Increase Bets
*McDonald’s Monthly Worldwide Sales Trail Estimates as U.S. Slump Deepens
*Hedge Funds Betting That OPEC-Led Rout in Crude-Oil Prices Is Nearing End
*Brazil Recovery May Hinge on Decisions Rousseff Makes Early in Next Term
*Energy Insiders Seeing ‘Fire Sale’ Buy Shares at Fastest Rate Since 2012 – too early?
*Older Americans Buoy Housing Market With Highest Ownership Rate – can afford too!
*Putin’s Ruble Collapse Is Tale of Failed Threats, Missteps and Cash Blown – pariah?
*Mexican Oil Rig Bond Rout Unjustified as Pemex Contracts Unaffected
*Putin New Deal for Russia Means end to 15 Years of Rising Living Standards – sad!

Friday’s Market Summary
A very mixed session Friday following a payrolls report that was strong on jobs, yet continues weak on earnings (CEO’s and senior management excepted). Workweek was only slightly better. At the end of the day (sorry), The winner was the Russell 2000 small cap +0.8% vs -0.5%, the goat was Dow Transports -0.9%. Dow 30 +0.3%, S&P 500 and Nasdaq Composite +0.2%; NDQ 100 FLAT??? (Note: NYSE Financials +0.7%: Brokers +1.6%??? KBW Banks +1.9%???Nasdaq Banks +1.7%???). Volume was nearly identical to Thursday at 3.36B shares (below recent average of 3.6B), but REAL Volume was above average at 755M shares. A/D’s and Breadth were neutral on NYSE and positive on Nasdaq. The VIX however fell to 11.82??? with a less bearish (slightly bullish?) range of 11.53-12.28???

Total NYSE Volume was steady at a below average 3.36B sjares vs 3.37B vs 3.58B vs 3.64B vs 4.14B. Average volume since 9/30 is about 3.6B shares or about 600M more than the 12-month average. Shares traded on the NYSE floor (aka REAL) were slightly lower at 755M shares vs 798M vs 776M vs 809M vs 877M (is that a trend?) vs 649M (lowest since 11/11 and unusual for a monthend). For comparison purposes, for the prior 12 months it is a historically weak 718M shares…but since 10/1: 815B shares – including that HUGE 1.22B share day – highest since 9/19, followed by two more 1B plus days leading to options expiry!. The lowest was 11/1’s 619M share session. April 30 – September 30 we had just SEVEN 800M shares…since 10/1: now at 19 – just one in Nov, and FIVE 900M+ days. Two 800M days for Dec.

A/D’s were neutral on the NYSE and positive on Nasdaq: NYSE: +1.1x vs -1.7x vs +1.8x vs +2x vs -3.5x; Nasdaq +1.9x vs +1.5x vs +1.6x vs +2.1x vs -3.5x. Breadth was similar: NYSE 1:1 vs -2.4x vs +2.4x vs +1.3x vs -3.8x!!! vs -2.4x; Nasdaq +1.6x vs -1.5x vs +2.2x vs +2.1x vs -4.7x!!! New 52 Week Highs climbed back to 363 vs 302 vs 328 vs 197 vs 201! vs 515! – their range for the year is 39-612!!! New Lows climbed again to a strong 283 vs 248 vs 185 vs 253 vs 447!!! The 2014 range is 24-1043!!! S&P VIX had another lower high and lower with a high of just 12.28 and a low of 11.53 before closing at 11.82 -.56! – leaving just one session without a ‘13’ print! This 10 days after hitting a very bearish 15.74, highest since 11/4, and just 4 days ago 14.75! We may again see those bearish extremes that had a high of 31.06 (highest since 11/28/11!!!). The average of the past 12 months is 13.97, with a low of 10.28!…high close of 26.25 on 10/15/14! TODAY is the closely watched payrolls report! Stay tuned.

U.S. bond market weaker but still in ‘good shape’ (watch to see if 30 yr goes to 3% or higher). The recent 12 month low yields (10’s 2.09%; 30’s 2.87%; and long TIP 0.83%), 10’s closed at 2.31% -5/8; 30’s 2.97% -5/8, and the long TIP 0.97% -11/16. Overnight slightly higher: 10’s 2.30% +1/32; 30’s 2.96% +3/16; and long TIP 0.96% +1/8.
Libor update: 0.236% 3 mos.; 0.330% 6 mos. – still near their new record lows! The Fed Funds rate has averaged 0.09% and is currently 0.11-0.13% – a 9-month high. T-Bills: 0.02% one-month; 0.01%! 3 mos; 0.14% (+.02!) one year.
Foreign bond yields lower – Japan, and Greece a tad higher but from 7.00%! (Benchmark is 10yr): Germany 0.72% -6!; UK 1.99%! -2; France 0.98%! -5!!!; Italy 1.96% -1; Spain 1.79%! -3; Portugal 2.70%! -3; Greece 7.03%! +3. This vs 07.47% last Thursday??? – WOW! Not for the faint of heart! 10/16’s close was 8.54%! – cycle low: 5.42%; Crisis high: 12.57%. Japan: 0.43% +2.

Gold tanked after holding above $1200, 3 of last 4 sessions, closing at the session low of $1190.40 -$17.30! (10 straight session highs of $1200+). This negates last Monday’s HUGE ‘key reversal’ that had a high of $1220.40 and almost closed a gap going back to 10/28 ($1226.40). No longer above the 40/50 day (streak ended at 3!) since 10/21! 11/7’s low was $1130.40, a new 12-month low!). The last 27 sessions have had prints below $1200 – first time since 12/31/13 Last close above $1300 was on 8/15. 7/17’s session high was $1346.60, highest since March 19th!!! Res/Sup is at $1200 (psych), then the 40 day at $1201, the 50 day $1203, then the 200 day at $1272 – bottoming? The 12-month high is $1392.60 on 3/17, highest high since 9/4/13. 11/7’s low was $1130.40! Overnight slightly higher but without a $1200 print (high: $1198.70)0. There have now been 10 highs above $1200 since 10/31. Silver at $16.25, following a slight new high of $16.68 on Friday. 12/1’s low was $14.12, more than a five year low.

Crude closed WEAK at $65.84 -.97 with another narrow range of $65.12-66.89, following an outside session that was technically a negative key reversal (ignore?). No conviction! Last Monday’s range was $69.62-$73.64 – 4 handles – with a low of $63.72 – a new five year plus low (6/2010)! 10/28’s session high was $77.83. 10/25’s high was $84.83. There have been 43!!! handles since peaking at $107.73 on June 13th, highest since 9/19/13. The record high of $147.27 was on 9/30/08, the low since on 12/30/11 is $74.95: $93.60 is the midpoint!!! Recent rally high and close are $110.70 and $110.53 respectively. RES at the 40 day ($77.31!), then the 50 day ($79.96!), and lastly the 200 day (95.26!), all increasing their rate of decline! A failure here could take us to $59!!! The recent range is now $63.72-$112.24 since 3/1/12. Overnight it is sharply lower at $64.47 -$1.37 with a session low of $64.10! – near the recent low of $63.72 set on `12/1! Note that following the financial crisis it traded down to $32.40 on 12/31/08 from a high of $147.27 just three months earlier (-78%!!!).

Overnight Equities:

European equities weak, Asia doing a tad better ex-India (weak!) and Korea: UK -0.9% vs +0.8% vs -0.2% vs -0.3% vs +1.2% vs -0.9%; France -0.9% vs +1.3% vs -0.9% vs – vs +0.3%; Germany -0.5% vs +1.3% vs -0.6% vs +0.3% vs -0.2%; Japan +0.1% vs +0.2% vs +0.9% vs +0.3% vs +0.4%; Hang Seng +0.2% vs +0.7% vs +1.7%!!! vs -1%! vs +1.2% vs -2.6%!!! – rioting will do that! Korea -0.4% vs — vs +0.9% vs +0.2% vs – vs -0.8%; India -1.2%! vs -0.4% vs +0.4% vs – vs -04% vs -0.5%. U.S. equity futures weaker after gapping down on the open: DOW -60 (range 48 plus 19 gap); SPX -7.40! (9 +1); NDQ -15.25!!! (21- no gap). Exciting, no?

Some random thoughts:

…to be jolly??? Maybe in our personal lives but certainly not with racial relations moving to the fore once again…just when you thought it was safe. Here are TB’s gripes:

*Police mentality continues…with blacks 21 times more likely to be killed by a police officer than whites…due to police being predominantly white? …due to stops being aimed at blacks (and let’s not forget Hispanics)…in fact over a 12-year period blacks were more than 100 times more likely to be stopped than whites…and over 90% were released without even taking the names! Their ‘concept’ of necessary force (as shown in the NYPD choke hold case was absurd…possibly to get him down but once he was down and with three other officers there, he continued to choke the suspect…which brings us to ‘resisting arrest’ – trying to back away with his arms in the air? Not accommodating, but resisting?

*Police must be objective and transparent in the investigations of officers. Have outside investigators involved so that trust is rebuilt…unless you believe all police are good guys…if so, good luck!

*How about this for contrast: Rudy Giuliani and former LAPD Chief Darryl Gates (now a consultant to the NYPD). Giuliani racially stereotyping and fomenting anger; Gates showing logic and reason. But the big thing is how other departments are handling it: as opposed to just giving more instruction to officers, the ‘enlightened’ ones are putting officers back on the street so they aren’t sitting in their cars (and armored Humvees), with helmets etc. It is working to rebuild trust in the community! Finally! You decide.

*While TB is disgusted with Giuliani’s statements, the black community must stop painting all black youths as innocent victims. If we continue, to show younger, innocent pictures of black teens, when they have changed and look a lot more dangerous (bigger, tattooed, etc.), the black community must take some responsibility…and who is hurt most in the riots? Black-owned businesses! Lastly, blacks are nearly as likely to cross the street if they see some black men in their path as white people. Let’s be realistic and work towards a solution. Blacks cannot continue to see all persons of color as ‘victims’ (Remember the OJ case?…he was no more black than any white man in Los Angeles, yet they defended him…the civil suit and his subsequent actions proving him undeserving of that kind of ‘sympathy’. But then the L.A. District Attorney and police bungled it badly), they must be objective too.

Just some food for thought…TB does not claim to have the answers but if we all (black, white, hispanic) put our collective heads together, the truth will come out. Eventually.

Have a great day!

TB

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